INDIO — Promoters of the Coachella and Stagecoach music festivals, two of America's premier music events, are threatening to move the shows — possibly out of the Coachella Valley — if a proposed admissions tax is enacted by the host city.
Goldenvoice president Paul Tollett said next year's festivals would be the last in Indio.
The threat comes in response to a string of text messages obtained by The Desert Sun in which Goldenvoice vice president Skip Paige tells an Indio official that organizers are seriously considering moving the festival out of the city.
Polo club owner Alex Haagen III said he and Goldenvoice would build a new venue somewhere else.
“If the tax initiative of putting $4million to $6 million onto Coachella gets on the ballot,” said Tollett, “we're going to take off 2014; 2015 we'll be at a new facility outside of Indio.”
A proposed measure that was being drafted by the Indio city attorney for 2014 would impose a 5 percent to 10 percent tax on admissions to entertainment events of more than 2,500 people.
Tollett calculated the tax would be about $36 per ticket, which he said he would not pass on to festival-goers. It would therefore cost the promoters $4 million to $6 million.
The City Council on June 6 declined to consider City Councilman Sam Torres' proposal to enact such a tax. Torres promised to spearhead a petition drive to get a measure on the November ballot to generate what he said would be an average of $18 a ticket or about $4 million for the city that cut roughly $4 million from its current budget through measures including layoffs and furloughs.
Cities have until Aug. 10 to get a tax measure on the ballot.
“We think this tax is outrageous for all the things we've done with Indio,” Tollett said. Goldenvioce estimates the festival currently generates more than $800,000 in ticket fees, tax revenue on about $9 million in food and beverages sold, and a Transient Occupancy Tax of more than $800,000.
Councilwoman Elaine Holmes warned at a June 2011 City Council meeting that an attendance or entertainment tax could prompt Goldenvoice to move its Coachella Music and Arts Festival out of the city.
“He can easily take it to Irvine or someplace else,” she said at the time. “We don't want to scare that concert away.”
But Tollett's vow came shortly after Torres forwarded to The Desert Sun a series of text messages with Paige indicating Goldenvoice had already considered moving the festivals out of Indio.
A June 18 message shows Paige telling Torres, “The deal to purchase El Dorado Polo Club is DOA. We are entering into escrow on 600 acres at 62 and Van Buren (in the unincorporated Vista Santa Rosa community).”
On June 21, Paige is shown saying, “You know were moving right? All this is a game. Why in the world would we stay where we are not wanted. LQ doesn't want us, Indio wants to take all our profits. Its a joke.
“We made the decision to move out of indio the day we got our 2 year permit and george (Williams, husband of former City Councilwoman Melanie Williams) tried to sue us.”
Williams filed an Oct. 5, 2011, objection against the city's current deal with Goldenvoice, saying the action failed to comply with California environmental law. He declined to comment Friday except to say “the record speaks for itself.”
Paige also declined to comment Friday about the text thread with Torres. Tollett said he hadn't seen the texts in their entirety and couldn't respond, but said some excerpts were misleading.
The June 21 text would have been sent before the La Quinta Chamber of Commerce named Goldenvoice its Business of the Year. Tollett said the award showed an appreciation for Goldenvoice and “we're doing great with them now.”
He also said Goldenvoice didn't decide to leave Indio when it got its two-year city festival permits in 2011, and it still doesn't want to move.
“Actions speak louder than words,” Tollet said Friday. “We tried to buy Eldorado (Polo Club). Does that say we wanted to leave?
A June 18 text from Paige says Torres' actions were “actually helping me get out of a terrible relationship I have with Empire.” But Tollett maintained that Paige actually meant Eldorado. He said Goldenvoice and Haagen would continue to be partners even if they moved from Empire.
Haagen said his agreement with Goldenvoice is confidential, calling them business partners.
“We're linked with Goldenvoice,” said Haagen. “That's why I've been buying more land around the (Empire) polo club. I've worked with these guys for 20 years since the first concert with Pearl Jam.”
Goldenvoice presented the first Coachella festival in 1999 after that 1993 Pearl Jam concert at Empire. It reported a loss of $800,000, but the event grew to become one of the most popular and critically acclaimed music festivals in the world, attracting a paid attendance of 225,000 each of the past two years.
Haagen said the Eldorado escrow is not “DOA” and that an agreement could still be finalized if Goldenvoice could get a long-term commitment from the city to permit them to grow their business at Empire.
“I want them to finalize the deal with Eldorado,” Haagen said.
Tollett said a purchase of 600 acres of land at Van Buren and Avenue 62 was “in limbo.” He declined to say what the farm property would be used for, but said, “We've spent money on options for new venues. I regret that, but I had to. There's too much uncertainty. In any other place, this festival would have had a long-term deal. We have it with the venues. With the city, it's been this year-to- year thing.”
Paige's texts indicate Goldenvoice hasn't had any meetings with city officials to discuss a long-term deal “because there isn't one,” Paige alleged.
But Indio Mayor Glenn Miller insisted a deal has always been in the works. Indio City Manager Dan Martinez said negotiations can't progress until the city knows what will happen with the tax proposal and Goldenvoice's potential deal to buy Eldorado.
Haagen said Van Buren and Avenue 62 has been “looked at” as a possible festival venue, but “I think there are better locations.
“There are multiple locations this could be put at,” he said. “My thinking is if there's another venue, it ought to be a venue that has 1,000 acres. Why go back to 600 if that's where we're at now?”
Both Paige, in his texts, and Haagen say the city of Coachella has made inquiries about moving the festival east. But city leaders insist their talks with Goldenvoice, as recently as April, have focused solely on the valley's easternmost city playing a bigger role in the festival — perhaps bringing campers and more foot traffic — but not moving the festival.
“We have always kept the lines of communication open with Goldenvoice. In a perfect and ideal world we would love that the Coachella music festival consider, at some point, being in the city of Coachella,” Mayor Eduardo Garcia said Thursday. “We've always seen the 80 percent undeveloped of the city as an ideal location.”
Paige's texts indicate Goldenvoice is eyeing county land. “(Riverside County Supervisor) John benoit has 400 acres in the county,” his texts to Torres state.
Michelle DeArmond, Benoit's chief of staff, said the supervisor had breakfast with Tollett and Paige in April and discussed more local philanthropy opportunities for Goldenvoice, including a health clinic in the east valley. They did not discuss relocating the festival, DeArmond said.
“With all the property the county has it wouldn't surprise me if the county was trying lure Goldenvoice,” Holmes said. “If I was the county I would be trying to lure Goldenvoice.”
Haagen said with the property Goldenvoice rents around the 300-acre Empire and the 270 acres at Eldorado, Goldenvoice would have more than 600 acres at its current location.
“I don't even want to talk about moving because I don't want to move,” said Haagen. “I want to stay in Indio. We love Indio.”
Tollett also said, “We love the city.
“There's one person on the City Council pushing for this,” he said. “He doesn't feel that it matters if they just throw $5 million or $6 million at us.”
Torres says it's only fair to look to Coachella ticket buyers for added revenues since Indio voters already agreed to double the rate of their utility users tax in 2010, and the city's police force and City Hall employees have already endured dramatic cuts and furloughs.
“Everyone in the city has done everything they can to make ends meet,” Torres said recently.
Tollett said Indio officials asked Goldenvoice to help the city with its financial crisis, and it agreed to add $2.33 to each ticket. But he said jumping from $2.33 to “$36, maybe even more for the VIP ticket, it's outrageous.
“They're singling out one business to put a tax on,” he said. “Forget legal, is that even fair? To go and pick one thing and say the shows that are happening at Empire are going to solve the problem because (Indio) fired police chiefs, mayor and city managers and are paying them forever.
“Sam, his slogan should be, ‘I want to turn the city of festivals into the city of festival' — the Tamale Festival, which is free. That's what he's doing. That's his legacy.”
Tollett had other concerns about continuing to hold the festival at Empire before the admissions tax was proposed. He said his ticketing agency had told him they could have sold 300,000 tickets to the two weekends of Coachella and 80,000 tickets to Stagecoach, making the prospect of a larger venue appealing.
He said he'd also like later curfews and more liberal sound restrictions.
But he said those issues are secondary to an attendance tax that would cost his company at least $4 million a year.
Haagen said his major concern is the tax's impact on his ability to do business in the future.
“We're competing with other cities around the western United States,” he said. “We do corporate events. We do sports events and we're competing. When you add a tax, you make it that much more difficult.”
Both Tollett and Haagen said they'd ignore their other concerns if the tax measure didn't get on the ballot.
About 2,700 Indio residents would need to sign the petition for the tax measure to go forward, based on the city's registered voters during the 2010 election, Torres said.
Tollett said Coachella fans around the world will be waiting to see if the measure's proponents hit that number.
“When I say there's going to be no 2014, realize what I'm saying,” Tollett said. “The Coachella festival-goers have to bank on what I'm saying. I say no 2014, there are going to be people who set their wedding during April. I can't come back in 2014. Once I say it, the dice are thrown.”